Read on Twitter
1/ A recent lightbulb moment of mine was that competitive advantage can be represented visually as 1 or more feedback loops. These create an advantage "flywheel" that maintain and grow a moat over time.
2/ Here's a few archetypical examples of common advantages represented as feedback loops:
3/ And some real-world examples I sketched out that combine multiple advantages into the flywheel engines driving growth:
4/ This helps emphasize that the most successful moats have multiple flywheels that feed off of each other's momentum. Like Google's tech advantages enabling stronger brand allegiance. Or Coke's marketing-driven brand feeding off of the distributor based network effects.
5/ Using the analogy of a feedback loop helps to think of an advantage as a moving, changing system. A system that needs catalysts to get started, and will gain momentum at first but still be slowed by friction over time.
6/ I wrote this up in a more detailed post here, including a section about the limiting factors that slow the flywheel down. https://futureblind.com/2019/08/03/advantage-flywheels/
7/7 h/t to @EricJorgenson for his thorough post on flywheel effects that first got me thinking about this. https://medium.com/evergreen-business-weekly/flywheel-effect-why-positive-feedback-loops-are-a-meta-competitive-advantage-6d0ed55b67c5
